April 10, 2014

#2 Supply - How Many Law Students Will Graduate in 2017 & 2018?

Last May, more students graduated from law school than ever before. By 2017, the number of students graduating from law school will be at their lowest level since the late 1970’s. This is really good news for students entering law school in 2014.

Predicting the number of graduates in any given year requires consideration of two numbers: the number of students who enrolledl three years prior, and the number who will graduate in the target year.

How Many Students Will Enroll in 2014 and 2015?

How many students will enroll? No less an expert than Paul Campos has estimated that 35,000 students will enroll in law school in 2014 (http://www.lawyersgunsmoneyblog.com/2013/12/law-school-applications-continue-their-steep-decline). Although he’s likely off by a few thousand, he’s definitely in the ballpark. The math behind the prediction is pretty straightforward. We know from LSAC data that about 54,000 people will apply to law school. From there we can use past data to estimate what percentage of those 54,000 applicants will attend law school. As you can see from the table below, from this fact we can get a fairly good estimate of how many of those applicants will actually end up in a law school classroom:

You’ll note that I had to estimate the percentage of students who will enroll in 2014 and 2015. I chose 70% in consideration of the trend of increasing percentage enrolling from 2007-2013. This increase presumably reflects the higher percentage of students gaining admission to at least one law school.

How Many Students Will Graduate in 2017 & 2018?

The next step is to estimate how many of those 38,399/36,478 students will graduate three years later. From 2007 to 2013, the percentage of JD’s matriculating from the entering class has varied from 86%-91%. For example, the 2008 national entering class consisted of 49,400 students. Three years later in 2011, 44,258 students graduated, or 90% of the original entering class. With this data, it’s pretty easy to provide a good estimate of how many students will graduate in 2017: 33,791 (choosing an 88% graduation rate). Predicting 2018 is a bit trickier since we don’t have applicant data for next year. However, we do have LSAT test taker data which shows we should probably expect about another 5% decline, leaving an estimate of 32,100.

How Does This Compare with Historical Data?

According to the ABA, 46,478 JD’s were awarded in the United States in 2013. That’s the largest number of law school graduates in American history. With an estimated 33,791 students graduating in 2017, that will be the lowest number of law school graduates since 1978.

From 46,478 students graduating in 2013 to 33,791 in 2017 marks a very large decline in the supply of law school graduates entering the labor market.

I want to emphasize that these are not crazy, pie-in-the-sky estimates. These are very similar, in fact slightly more conservative, than those posted by Paul Campos.

Next week, I will turn to the demand side by looking at the number of full-time, long-term JD required and JD advantage positions available to students in 2017 and 2018.

Update #1:

I'm reluctant to respond to the comments in piecemeal fashion as I don't want to get too deep in the weeds. Not to mention that this is an extremely busy time of year in the admissions office and my first priority is responding to the forty to fifty e-mails I receive per day. But there are some good (and some not so good) comments and questions here that I'll try to address before post #3. Maybe this weekend or early next week.

I will respond to one question, since it's pretty specific.

@Spenny asked how I arrived at my estimate of a 5% applicant decline for the 2015 entering class. Admittedly it's tough to know for sure what the next cycle will bring in terms of application numbers. The main data we have are LSAT test taker numbers. While not the most effective predictor, they can at least give us a sense of where the market is headed. According to LSAC, October 2013 was down 10.9%, December 2014 was down 6.2%, and February was up 1.1%. However, we've been told that December was adversely affected by weather, with a number of people scheduled for December rescheduling for February. Based on this data, 5% seemed like a fair guess estimate.

Update #2:

@CBR - good point. As CBR points out, India has more law school graduates than the U.S. I have updated the post accordingly.

Update #3:

@JM. Ok, I said I would try to avoid addressing specific comments, but this is one is particularly absurd and irksome. You won't count as positive outcomes attorney positions with law firms of fewer than 10 attorneys? Have you ever been to Kansas? I doubt it. Because if you had, you would have likely seen numerous county seats and small towns with law offices with fewer than ten attorneys. Which is great, because while many of our students are looking to practice in large cities at big law firms, we also have a fair number of students who came to law school expressly for the purpose of practicing in towns like Garden City, Hutchinson, Salina and Manhattan (the one in Kansas). In a similar vein, you don't count full-time, long-term government positions as positive outcomes? Why on earth wouldn't you? Many, many students are interested in exactly that type of outcome. If there were 100 government lawyer jobs available to KU Law students, I think we'd fill them in a heartbeat. And that's even if 100 NLJ 250 jobs were available. They're typically great jobs and a wonderful way to begin a legal career.

Update #4

Thanks to Grant McLoughlin who caught an error in my post. I should have said that 2013 saw the most law school graduates than ever before. I've corrected the sentence accordingly as there will be fewer graduates in 2014 than last year. I'm surprised the rest of you missed it!

Update #5

@JM - Volunteer positions are not counted in employment statistics. All twenty of our students reported as being employed in full-time, long-term JD required government positions are working in paid positions of at least thirty-five hours per week with a term of at least one year. So there's that.

As for your comment about people working in firms of less than ten attorneys, how do you know that our students aren't making enough to cover their debt load? Did you ask them how much they borrowed for law school? If they received scholarships? How much they're earning? Are they enrolled in loan repayment programs? Have they taken advantage of rural area loan repayment plans? Do they have a spouse that contributes income? The fact of the matter is that one reason some students choose KU Law is because we have relatively low tuition rates. More than half of our students also receive some form of scholarship. For students with debt, the average debt at graduation is less than $80,000. (29th best in the nation!). Not only that, but the cost of living is low in Kansas, particularly in rural areas. So it is quite feasible to make a salary of $40,000 - $60,000 and live a nice, middle class life. That's not to say there aren't more lucrative outcomes for attorneys at these firms. Between agriculture, oil and gas, and the day to day legal needs of a community, there's a fair amount of money to be made outside of urban areas like Kansas City (or Denver, Phoenix, etc.). But I guess you hadn't thought about that when you made your "analysis" of our employment data. Or more likely, that kind of information didn't match your predisposed views. Much better to ignore it and just make blanket assumptions (all government jobs are phony volunteer jobs; all new graduates working at small firms are in debt shackles). Wouldn't want the facts to get in the way of a good rant.

For lack of space, I didn't even mention the fact that for some reason you count federal clerkships as "decent" outcomes, but not state clerkships. That's another weird conclusion. Well, maybe not so weird if your goal was just to slant and obfuscate to make a law school look bad, rather than actually try to assess whether that law school, KU in this case, is actually providing positive outcomes for our students. Really, if you're going to make obnoxious assertions like only 50 KU students found "decent" employment, try backing it up with something a little stronger than what you've provided. Otherwise, people might think you are being dishonest in your discourse.

Update #6

I think we've heard a sufficient variety of views on the first few posts, so comments are closed. I look forward to hearing from everyone when post #3 goes up either this weekend, or early next week. Professor Tamanaha - I'll respond to your comment first.

Comments

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Biglaw firms have been complaining for years about the poor research and writing skills of new associates, among other things. I doubt that they will take kindly (or continue to pay top dollar) to lower caliber graduates with even poorer skills than the recent crop. One likely result will be that firms stop recruiting at the schools that have lowered admission criteria significantly. They will also outsource to India, use new technologies to replace attorneys, hire more laterals and returning moms.

Of course, any employer will expect that new grads pass the bar. I have seen very little discussion on this aspect of lower admission standards. Certainly in places like NY this is going to be a big issue and I think the schools that are lowering their standards know it.

Hiring laterals will result in pushing the problem to lower tier firms. It is still going to be tough for a class of 13 person who has had marginal employment for 3 to 4 years to get hired. Government jobs will likely be available for those lower down the law school tier. The biggest impediment may be that many law grads may have trouble passing the bar. Many of those jobs will not help pay off law school debt very quickly, and I agree with posters who say students should be very leary of IBER programs. Will all this cause law school enrollment to increase? Hard to say, but many of the jobs that students are now pursuing, like nurse practitioner, may still be more attractive.

I am a law professor. Were a 1L to make many of the commenters' statements, I'd spend some time in class asking others to critique their logic and persuasiveness.

For example:

"Steven, please stop this. You are hurting young people in a real and tangible way." Mr. Freedman, please stop selling. Those individuals you advised in 2008 and 2009 (you know, the ones about whom you just said 'oops') are real people. They were actually hurt by this." "I sincerely beg you to stop with these article. Don't make things worse," How is Steve hurting young people? How is he making things worse? How did he hurt anyone back in 2008? Steve says throughout that his numbers are estimates and fair guesses. He is speaking to "young people" who, in three years, will be expected to do complex analysis and problem solving for clients with life-altering problems. If these "young people" cannot evaluate for themselves the information Steve offers and accept it without question, then they are ill-prepared for law school. Nothing Steve is doing hurts them in any way. In fact, by offering information and hypotheses, he helps them add to the pool of criteria they are weighing in deciding whether or not to attend law school.

Then there is JoJo. "That leaves an oversupply of only 7,100 if the jobs don't increase. In other words, 1 in 4 graduates who attend law school and borrow $200,000 in money still won't have any sort of FT, LT job in law. Those aren't good numbers, they are bad numbers. They are just less bad than the current numbers. You realize that there is a difference between "good" and "less bad"? JoJo also gave us yesterday the example of the "Harvard educated" lawyer who is looking for work.

OK. So. JoJo. Is your claim that every member of a JD class should get a job, no matter how poorly she did in school, no matter how unprofessional her conduct is, no matter how ill-suited she is for the profession (something potential employers can glean through interviews and recommendations)? When I read about that "Harvard educated" lawyer, I thought a couple of things. I thought that lawyer probably had no ability whatsoever to work with others, or had screwed up some major case, or had been disciplined by the bar. He's not going to put that stuff in a Craigslist ad. But sometimes, just maybe, people are unemployed because they didn't work hard in law school or in a previous job. In other words, it's not the law schools' fault.

How about this comment? "What you casually state here as a 'fair guess' may be cherry picked and touted as a 'fact' elsewhere." First, I don't see anything casual here. Steve clearly put some time and analysis into these numbers. Second, how on earth is it his fault if someone we don't know about might twist what he said in some other outlet? So, we should all stop saying what we think because of the potential for exploitation? I don't think that's right.

One last comment. "The FL should issue some sort of disclaimer before posting a conceded 'pitch' accompanied by a 'look at the number of full-time, long-term JD required and JD advantage positions available to students in 2017 and 2018.'" It did. That's why Steve used words like "prediction" and "estimates."

I believe wholeheartedly that there are many things to critique about law schools. Let's be sure, however, that we play fair. If critiques are this thin, they're not going to stand up to rigorous analysis, and they effect will be the opposite of what you want.

"If these "young people" cannot evaluate for themselves the information Steve offers and accept it without question, then they are ill-prepared for law school."

I think most of the people who left comments would agree with this. I believe what they take issue with is law schools enrolling students who are clearly "ill prepared for law school."

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"But sometimes, just maybe, people are unemployed because they didn't work hard in law school or in a previous job. In other words, it's not the law schools' fault."

Look I doubt anyone seriously believes that everyone should be entitled to a job. Sure, some people are probably unemployed for good reason. Do you honestly believe that one of the significant factors contributing to law graduates' poor unemployment outcomes is that so many of them too lazy to secure a job? Really? Its easy to pick apart JoJo's comments, but its clear that his/her point was that there will continue to a huge gap between the supply of new graduates and the number of jobs available to them. 7k sounds like a huge gap to me. I think people are right to be worried about it.

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It would be nice if people engaged with the substantive qualms people have even if they stumble over their points in anonymous comments section.

Responding to Prof. McElroy: "OK. So. JoJo. Is your claim that every member of a JD class should get a job, no matter how poorly she did in school, no matter how unprofessional her conduct is, no matter how ill-suited she is for the profession (something potential employers can glean through interviews and recommendations)?"

I very much agree with you - not everyone is well suited for the profession, not everyone deserves a job (I went to a good school but honestly would only think about hiring 2 people I graduated with to do legal work for me, and they were both older, more mature students).

But if all that is true, what do you have to say about the dilution of admission standards? That more people than ever are now being admitted to law schools instead of being turned away by admission committees like they probably should be? It really does seem as though law schools are willing to enroll anyone with a pulse and access to unlimited student loans. And that's deplorable.

I don't understand why it is deplorable. The students enrolling in law schools have the information about job placement, bar passage, etc. Presumably, they have decided that they will fall on the positive side of the statistics. They make the choice to accept the offer of admission. The law school makes a commitment to educate them to the best of its ability. If the law school is so terrible and lacks judgment in admitting students, why would a student then choose to go there? It's all in the student's control.

What's more, I know from experience that it can be impossible to tell ahead of time which students are going to succeed and which will not. I've had students with high entering numbers procrastinate and end up in the bottom half of the class. I've had students with very low entering numbers knock my socks off because they worked hard and took advantage of the school's resources. Some bright students are very capable in some other discipline, but their minds just don't do the legal analysis thing very well. That's why applicants need to take some responsibility to make sure that law school is a good idea for them, regardless of whether the law school thinks so.

No name, I wouldn't say that law schools in general are willing to enroll anyone, I would say that some are. To me, the solution is the federal government must immediately restrict student loans to schools with an acceptable bar passage rate and employment rate -- or at least the former. I agree with other posters, I do not see a government job, or a job in a very small firm as a failure, but I do see a low bar passage rate as a severe problem.

Steven, since you spotlighted my comment and labeled it "absurd," I will explain myself further.

First, I think jobs in firms of 2-10 lawyers are great for young lawyers. In fact, I work in one. And contrary to most lawyers, I love my job. However, these jobs do not support the debt level that most grads are required to take to pay for school in 2014. Luckily, I worked at a AMLaw 50 firm first, and paid off all of my debt in under two years.

So let's get one things straight, the fact that jobs in firms of 2-10 attorneys no longer count as good outcomes is your fault. The insatiable greed of legal acadamia has made them untenable. Take the blame for once.

Second, I will count every single government job that is a legitimate permanent hire. Even if the salary is under $40,000, as it was for my friend and classmate. However, I will not count volunteer internships as full-time, long-term, bar passage required legal employment. And I will not count them as a good employment outcome. If a given school reports 10 attorneys working in Government, I assume that no more than 5 have a real job.

I'll close with this. All of your problems will be solved if you reduce tuition to the level it was 40 years ago (inflation adjusted). How's that? No more criticism, no more guilt over employment outcomes, no more sorry carsalesmanship and excuse making that denigrates what should be an honorable profession.

Professor McElroy, do you really see this series as being a case of "information Steve offers" to be evaluated?

Or is it a slick sales pitch?

Consider how he opens the series:

"Why 2017-2018 Will Be a Fantastic Time to Graduate from Law School".

A fantastic time. Titles and lead lines have a purpose. They stick in the mind, particularly after the details following become clouded by the events (whatever they may be) of the next few days. But the lead line, the sound bite, it sticks.

Madison Avenue is well aware of this. Hucksters like Ann Coulter are well aware of this.